How to Save Japan
From Its Own Rescue Plans

By

Mark Buchman and

Charles Wolf Jr.

Updated Oct. 20, 1998 12:23 a.m. ET

The familiar remedies for Japan's economic woes are not working, nor are they likely to. Last year, the misnamed "Big Bang" liberalization program, in which financial services were partly deregulated, contributed to the depreciation of the yen. Last month, Japan's Central Bank lowered its overnight funds rate from 1/2 to 1/4 of 1% (the comparable U.S. rate is 5%), a move whose limited effect was to foster capital flight from Japan to higher yielding foreign assets.